Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

Maryland Becomes the First State to Restrict Surveillance Pricing in the Food Industry

Skadden Publication

Boris Bershteyn Karen M. Lent Michael H. Menitove Anna E. Drootin Adam G. Kochman

Executive Summary

  • What’s new: Maryland’s Protection From Predatory Pricing Act will take effect October 1, 2026, prohibiting food retailers and third-party delivery services from using surveillance pricing to set higher prices for consumers using their personal data. 
  • Why it matters: The law is the first of its kind targeting surveillance pricing practices in the food industry. 
  • What to do next: Food retailers and third-party delivery service providers should consider evaluating the software and data they use to set prices, confirm compliance with enacted statutes, and monitor legislative developments at the federal and state levels, as well as any related case law.

__________

On April 28, 2026, Maryland Democratic Gov. Wes Moore signed House Bill 895, the Protection From Predatory Pricing Act (the Act). In passing the Act, Maryland becomes the first state to regulate personalized pricing, also known as “surveillance pricing,” specifically in the food industry.

Surveillance pricing practices include the use of technology, such as pricing algorithms or other artificial intelligence tools, to set prices personalized to a particular customer. Some of these technologies may rely on customers’ personal data (including location, browser history, purchasing history and demographics) to set, recommend or adjust personalized prices.

The Act applies to:

  • “Food retailers” operating a business establishment with a minimum of 15,000 square feet and selling food exempt from the sales and use tax under Md. Tax-Gen. § 11-206(c).
  • “Third-party delivery service providers” that “facilitate[] as a consumer service the delivery of food that is exempt from the sales and use tax” under Md. Tax-Gen. § 11-206(c).

Under the Act, food retailers and third-party delivery service providers are prohibited from using surveillance pricing or consumers’ “personal data” to set higher food prices for individual consumers. “Personal data” is defined in reference to Md. Com. Law § 14-4701 and includes “any information that is linked or can be reasonably linked to an identified or identifiable consumer,” excluding de-identified data and publicly available information.

The Act also prohibits the use of “protected class data” to offer, advertise or sell a consumer good or service in circumstances where it would have the effect of withholding or denying an accommodation, advantage, facility, privilege or service available to others outside a protected class. “Protected class data” is defined as “information about an individual or group of individuals that alone, or in combination, directly or by implication identifies a characteristic that is legally protected from discrimination under the laws of the state or under federal law.”

The Act will take effect on October 1, 2026. The Consumer Protection Division of the Maryland Attorney General’s Office will enforce the Act, and there is no private right of action. Violations are subject to up to $10,000 per violation or up to $25,000 per violation for repeat violators.

While the Act restricts food retailers and third-party delivery service providers’ use of consumers’ personal data to increase prices, the Act includes several noteworthy carve-outs, including:

  • Promotional pricing offers, loyalty program benefits, or other temporary discounts or changes to pricing related to retention of existing customers.
  • Setting different prices based on objective costs attributable to different consumers, such as shipping or taxes.
  • Offering prices through loyalty, membership or rewards programs in which any consumer may voluntarily enroll or consent to participate.
  • Offering prices to consumers who consent to providing personal data or other information in exchange for obtaining the price.

Trends in Legislation Targeting Surveillance Pricing

The Act is the latest development in an evolving legislative landscape targeting surveillance pricing at the federal and state levels.

At the federal level, there are three pending bills that would regulate surveillance pricing:

  1. House legislators introduced the Stop Price Gouging in Grocery Stores Act of 2025, which was referred to the House Committee on Energy and Commerce and the House Judiciary Committee. The bill seeks to prohibit retail food stores from adjusting prices or using electronic shelf labels to adjust prices based on consumers’ personal information.
  2. Rep. Greg Casar, D-Texas, introduced the Stop AI Price Gouging and Wage Fixing Act of 2025, which was referred to the House Committee on Energy and Commerce, the House Judiciary Committee and the House Committee on Education and the Workforce. This bill seeks to restrict the use of surveillance pricing broadly and would prohibit the use of “personal information, genetic information, behavior, or biometrics” by an “automated decision system to offer or inform a customized price for a good or service.”
  3. Sens. Ruben Gallego, D-Ariz., Kirsten Gillibrand, D-N.Y., Cory Booker, D-N.J., and Angela Alsobrooks, D-Md., introduced the One Fair Price Act of 2025, which was referred to the Senate Committee on Commerce, Science and Transportation. This bill also seeks to broadly restrict the use of surveillance pricing and would render it “unlawful for a person to offer or charge different prices to different consumers for the same, or a substantially similar, product or service” using surveillance data.

In New York, the Algorithmic Pricing Disclosure Act requires retailers that set prices using an algorithm based on consumers’ personal data to display a disclosure stating, “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” And two proposed bills seek to ban surveillance pricing by grocery and drug stores. New York S8616 was referred to the Senate Consumer Protection Committee, and New York A9396 was referred to the Assembly Consumer Affairs and Protection Committee.

Legislators in New Jersey and Pennsylvania have also introduced bills targeting grocery stores’ use of surveillance pricing. New Jersey S3612 was approved by the Senate Commerce Committee and has been referred to the Senate Budget and Appropriations Committee. Pennsylvania SB 1205 has been referred to the Consumer Protection & Professional Licensure Committee.

Next Steps

Food retailers and third-party delivery service providers that do business in Maryland should consider assessing their pricing practices to ensure they comply with the Act.

As we’ve highlighted recently, varied legislation has been proposed and adopted across jurisdictions, and case law continues to develop related to the use of consumer data in pricing. As a result, companies that employ surveillance pricing should consider evaluating the software and data used to set their prices and monitor new federal and state requirements, as well as any case law related to the use of consumer data in pricing.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

BACK TO TOP